DTN Before The Bell Grain Comments

Morning CME Globex Update:

March corn was unchanged, March soybeans were down 3 1/4 cents, and March Chicago wheat was down 2 1/4 cents. At 8 a.m. CST, USDA announced 3.9 million bushels (107,000 mt) of U.S. soybeans were sold to unknown destinations for 2016-17. Grains were steady to lower early, holding their fire until they see the whites of Thursday's new estimates from USDA. USDA's weekly report of export sales was bullish for soybeans and wheat, neutral-to-bullish for corn.

Other Markets:

Dow Jones:	Higher
U.S. Dollar Index:	Lower
Gold:	Higher
Crude Oil:	Higher

Corn:

March corn was unchanged early Thursday, staying just shy of the January high at $3.71 in front of Thursday's WASDE report, due out at 11 a.m. CST. Thanks to increased exports this season, we may see a smaller estimate of U.S. ending stocks in Thursday's numbers, but the main attention will be on South America's crop estimates, now in the southern equivalent of August. Early Thursday, Brazil's government estimated its corn crop at 87.4 mmt, up from USDA's January estimate of 86.5 mmt and citing good weather. USDA said last week's export sales and shipments of corn totaled 38.3 and 44.3 million bushels respectively, a neutral to bullish combination for the week that has total exports up 67% in 2016-17 from a year ago. South America's next crops remain a bearish concern for corn prices, but so far, March corn continues to trend gradually higher with resistance being challenged at $3.71. DTN's National Corn Index closed at $3.34 Wednesday, priced 37 cents below the March contract and near its highest price in seven months. In outside markets, the March U.S. dollar index is steady while gold and crude oil are modestly higher.

Soybeans:

At 8 a.m. CST, USDA announced 3.9 million bushels (107,000 mt) of U.S. soybeans were sold to unknown destinations for 2016-17. March soybeans were down 3 1/4 cents at the 7:45 a.m. pause, giving back part of Wednesday's 16-cent gain as traders wait to examine USDA's next round of monthly estimates later Thursday morning. Like corn, USDA's estimate of domestic ending soybean stocks could come down a little, but more attention will be on crop estimates down south, especially for Brazil where the government just estimated the soybean crop at 105.6 mmt, up from USDA's January estimate of 104.0 mmt. Early Thursday, USDA said last week's U.S. export sales and shipments of soybeans totaled 19.7 and 60.3 million bushels respectively, a bullish combination that puts total exports up 21% in 2016-17 from a year ago. Because this is the month when Brazil's soybean exports typically pick up, we would naturally expect prices to come under pressure, but so far, March soybeans are maintaining a gradual uptrend, roughly 30 cents from their January high of $10.80. DTN's National Soybean Index closed at $9.83 Wednesday, priced 76 cents below the March contract and down from its highest price in six months.

Wheat:

March Chicago wheat was down 2 1/4 cents early, compressed into a narrow trading range ahead of Thursday's WASDE report. Everyone already knows wheat's numbers will be bearish again and Dow Jones' survey expects a slight increase in USDA's estimate of world ending wheat stocks. There is not much chance of surprise in February unless USDA wants to go back and revise old estimates -- something that occasionally happens and always keeps us on our toes. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 19.4 and 22.3 million bushels, a bullish combination for the week at a time of year when the U.S. is holding the bulk of the world's exportable excess. There is no bullish fundamental argument for higher wheat prices, but March Chicago wheat does remain in an uptrend with a good chance of taking out the January high of $4.38, thanks to the improving demand reflected in cash prices. DTN's National SRW index closed at $3.95 Wednesday, priced 38 cents below the March contract and near its highest price in six months.

Todd Hultman can be reached at todd.hultman@dtn.com

FollowTodd on Twitter@ToddHultman1

(KA)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.